Preface:

This case study is about the effectiveness and necessity of customer relationship management in today

dynamic markets. Its thoroughly explain that how KLM royal Dutch airline emerged from an operation

driven company to customer driven company by implementing customer relationship management in an

quite effective manner.

Brief introduction of KLM:

KLM Royal Dutch Airlines (now merged with Air France) was an international airline operating world-wide.

KLM Group’s four core activities were: passenger transport, cargo transport, engineering and

maintenance, and charter/low cost flights. In fiscal year 2004/2005, KLM merged with Air France and

became a member of the SkyTeam Alliance, a global alliance in which several important European,

American and Asian airlines.

The deregulation in airline industry e.g. European free zone and the world political events e.g. 9/11 effect

airlines badly. Putting increased operational cost and less passengers on board. In response, KLM in

2003/2004 set out to reduce its internal cost base structurally by €650 million by April 2005.

Question # 1:

QUESTION: WHY DO YOU THINK KLM WON THE GARTNER AWARD?

ANSWER: Priorly KLM was an operation driven company where operational excellences was taken on

board and customers priorities was ignored. To change whole organization from operational driven

company to customer driven organization was not a simple task. KLM’s initiatives toward CRM were done

in an excellent way. Including the skepticism about CRM because of failure of 1997 CRM’s initiative

organization implemented it. By putting emphasis on Building Blocks of CRM: (1) vision, (2) strategy, (3)

valued customer experience, (4) organizational collaboration, (5) processes, (6) information, (7)

technology, and (8) metrics. And KLM’S ability to combine grand strategic vision with execution, and

deployment of software applications with cultural Change and integrating all aspects of CRM make him
award winner. Further action plan on CRM implementation also have contributed well. CRM into actions

put by the following processes:

• Identification of customer value segments;

• Better understanding of customer needs and preferences;

• Creation of targeted marketing and sales campaigns for specific customer segments;

• Monitoring of customer responses;

• Applying experiences to future campaigns;

• Better steering of customer buying and traveling behavior.

Question #2

QUESTION: HOE WOULD YOU CHARACTERIZE THE APPROACH TAKEN BY KLM TO INFUSE CRM

. INTO THE ORGANIZATION? HOW DOES IT DIFFER FROM 1997 APPROACH?

ANSWER: first CRM step was taken to make strategic building blocks on which KLM will build customer

centric approach. Three building blocks for KLM Commercial: (1) the customer, (2) CRM And (3) e-

business.and then creation of customer relationship department under the supervision of critina zanchii.

Campaign management8 was chosen as a first CRM project. The project was termed CIAO (Customer

Insight, Analysis and Opportunities). CIAO was a project that would introduce CRM in KLM’s marketing

communication to allow the company “to deliver the right offer to the right customer at the right time and

via the right channel. Software technology played good role in infusion of CRM e.g.

INTEGRATED CUSTOMER DATA: With CIAO, organization moves beyond just the sole intention of

rewarding customers for spending more of their patronage with KLM. It set out to build a true relationship

with its most valuable customers based on integration and consolidation of its data on these customers.

CRM PROGRAM DRIVE: The success of the campaign management project was crucial for creating the

necessary momentum for further CRM deployment. The ambition was to eventually transform the entire

enterprise by creating chains of successful CRM projects VISION-INTO-ACTION TRANSLATION: KLM’s

CRM vision and mission statements were translated into the following three

More personalized and consistent service delivery across all interaction points;

More customer profitability based steering;

More customer-centric organization

EDUCATION AND TRAINING: Employee education and training was also supportive for KLM’s strategic

transition. PROGRAM MANAGEMENT: This manager was responsible for supporting and facilitating the

work of both the CRM Meeting and the Business Executive Meeting.

This approach differs from 1997 approach on the basis of planning, commitment, and the governance

structure. The support of business side was absent in 1997 while in this approach all organization’s

management was curious about the initiative because of skepticism. And the high cost of furcated

technologies because of lack of planning was also a difference.

Question #3

QUESTION: HOW DIFFICULT WILL IT BE TO MOVE CRM BRYOND MARKETING INTO THE REST OF

. KLM ENTERPRISE? WHY? WHICH APPROACH WOLD U TAKES TO ROLE CRM OUT

. INTO THE REST OF KLM ORGANIZATION? WHERE WOULD YOU START?

ANSWER: once the process is in flow then I think it will not much difficult as compared to starting. Flow

has been made to implement and experiences gained will be much helpful. Although it would be not

simple enough there will be need of rigorous training, patience and commitment.

Step by step Approach will be used.